Markup calculator
Calculate markup percentage, gross profit dollars, and the margin equivalent from cost and selling price.
What this calculator covers
Use this markup calculator to see how much selling price sits above cost and how that add-on translates into markup percentage.
Markup is useful when pricing rules are set from cost, while the paired margin figure helps compare the same product against revenue-based targets.
Frequently asked questions
- What is the practical difference between markup and margin?
- Markup divides profit by cost, so a 25 percent markup means you added a quarter of the cost on top. Margin divides the same profit by the selling price, so the same deal produces a lower margin percentage than markup percentage. Neither is more correct — they answer different questions about the same transaction.
- Why is my markup percentage always higher than my margin percentage?
- Because they use different denominators: markup uses the smaller cost figure while margin uses the larger selling price. For any given profit amount, dividing by the smaller number always produces the larger percentage, so markup will always exceed the equivalent margin.
- How do I set a selling price if I know the cost and want a specific markup?
- Multiply the cost by (1 + desired markup percentage / 100). For example, a cost of $80 with a 50 percent markup target gives a selling price of $120. Enter that selling price here to verify the resulting markup and margin match your expectations.
- Does this calculator account for discounts or returns?
- No — it uses the entered selling price as the final realized price with no adjustments for discounts, returns, or rebates. If your effective realized price differs from the list price, use the actual net revenue figure when entering the selling price.
Tool
Run the calculation
Result
RESULT · MARKUP
â„–168
Primary result
56.25%
$80.00 in cost and $125.00 in selling price leaves $45.00 in gross profit, which equals a 56.25% markup.
- Cost
- $80.00
- Selling price
- $125.00
- Gross profit
- $45.00
- Margin equivalent
- 36.00%
Step-by-step solution
- 1.Subtract cost from selling price to get gross profit: $125.00 - $80.00 = $45.00.
- 2.Divide gross profit by cost to see how much profit is added for each cost dollar.
- 3.Convert that ratio to a percent to read the markup of 56.25%.
Walkthrough
Visual walkthrough
Markup asks how large the profit add-on is relative to the product cost base instead of revenue.
01
Measure the dollar spread
$125.00 - $80.00 = $45.00
This gross profit is the portion of the selling price above cost.
02
Scale profit by cost
$45.00 ÷ $80.00
Markup uses cost as the denominator, so it answers how much was added onto the cost basis.
03
Read the markup percent
Markup is useful for pricing policy because it ties the profit add-on directly to unit cost.
56.25% markup